Kevin purchases a home in Jackson, Wyoming for $480,000. He makes a 20% down payment and finances the remainder with a 30-year deed of trust loan at a 6% annual interest rate. What is Kevin's first month's interest payment on this Wyoming deed of trust loan?
Correct Answer
A) $1,920
Step 1 – Calculate the loan amount: $480,000 × 20% = $96,000 down payment. Loan amount = $480,000 − $96,000 = $384,000. Step 2 – Calculate the monthly interest rate: 6% annual ÷ 12 months = 0.5% per month. Step 3 – Calculate the first month's interest: $384,000 × 0.005 = $1,920. The first month's interest on Kevin's Wyoming deed of trust loan is $1,920.
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